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John deposited $10,000 to open a new savings account that [#permalink]
01 Feb 2008, 13:08

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John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened?

John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened?

1. $10,0002. $10,1013. $10,2004. $10,2015. $10,400

FV = PV ( 1 + i/n)^ntFV = 10000(1+ .04/4)^2(1)4 _________________

You tried your best and you failed miserably. The lesson is 'never try'. -Homer Simpson

John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened?

1. $10,0002. $10,1013. $10,2004. $10,2015. $10,400

I=P(1+r/n)^nt --> I=10000(1+.04/4)^4(1/2) ---> 10000(1+.01)^2 -->

1.01*1.01 = 1.021 so 10000*1.02 --> 10201

Please note this is a problem in which you have to pay attention to the answer choices. C and D are very close so you can't really afford to do any aproximation here.

John deposited $10,000 to open a new savings account that earned 4% annual interest,compounded quarterly. If there were no other transactions in the account, what was the amount of money in john's account 6 months after the account was opened?